Options & derivatives
In the money
Also called Out of the money or At the money
Whether exercising an option now would produce a gain.
How it works
A call is in the money when the price is above the strike; a put when it is below. At the money means the two are roughly equal, and out of the money means exercising would make no sense.
Out-of-the-money options are cheaper, have no intrinsic value, and expire worthless far more often than buyers expect.
Related terms
- Strike priceThe price at which an option holder can buy or sell the underlying asset.
- Intrinsic value (options)What an option would be worth if it were exercised immediately.
- PremiumThe price paid for an option, made up of intrinsic value plus time value.
- ExpiryThe date after which an option ceases to exist.
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